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Energy Secretary to Defend Solyndra Loan to Congress

WASHINGTON — An unrepentant energy secretary will square off on Thursday with a Republican-led committee that has spent months arguing that his department showed political favoritism and incompetence when it approved a $535 million loan guarantee for Solyndra, a California manufacturer of solar modules that later went bankrupt.

In a dig at some members of Congress, Mr. Chu, a Nobel Prize winner in physics, will also say, “We appreciate the support the loan programs have received from many members of Congress — including nearly 500 letters to the department — who have urged us to accelerate our efforts and to fund worthy projects in their states.”

“While we are disappointed in the outcome of this particular loan, we support Congress’s mandate to finance the deployment of innovative technologies, and believe that our portfolio of loans does so responsibly,” the secretary will say, according to the excerpts.

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Stephen ChuCredit
Rick Bowmer/Associated Press

The Energy Department has blamed a collapse in the price of solar panels for the company’s demise, largely because of a slowdown in global demand and a jump in production, some of it from Chinese companies subsidized by the Beijing government.

Representative Fred Upton, the Michigan Republican who is chairman of the Energy and Commerce Committee, pointed out in a statement Wednesday that it had begun an investigation before Solyndra declared bankruptcy, and that since then the Federal Bureau of Investigation had raided the company’s offices. The committee has found and published e-mails showing doubts within the administration about the wisdom of the loan.

“We need to understand why red flags were ignored because of the urgency to get these dollars out the door,” Mr. Upton said. “And we need to know whether this administration believes, after all we have learned, whether it is a mistake to put taxpayers on the line for half a billion dollars to this one company.”

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Solyndra's headquarters in Fremont, Calif. The Energy Department has said a collapse in the price of solar panels led to the company's demise.Credit
Paul Sakuma/Associated Press

Republicans have been seeking to show that the loan was approved because a major Solyndra investor was a venture capital fund controlled by an Oklahoma oil billionaire who was a “bundler” for the Obama campaign in 2008.

But in an interview on Tuesday on NPR, Mr. Chu said that he and other top officials at the department were not aware that some of the private investors who put $1 billion into Solyndra were also Democratic or Republican Party donors, and that he did not know if the career employees who evaluated the Solyndra loan were aware. And, he added, “There are other people who have been associated with the Republican Party and have been donors there as part of this $1 billion package of private investment.”

The committee has subpoenaed documents from the White House about Solyndra, but the administration has complained that the subpoena is too broad. Mr. Chu will stress that his department has provided 186,000 pages of documents to the committee. “As this extensive record has made clear, the loan guarantee to Solyndra was subject to proper, rigorous scrutiny and healthy debate during every phase of the process,” he says in his prepared remarks.

Some Republicans have called for Mr. Chu’s resignation, although the secretary, in his radio interview, said, “As far as I know, I do have the support — the full support — of the president.”

In fact, firing Mr. Chu over Solyndra would be difficult for the administration since the finalization of the loan was announced by Vice President Joseph R. Biden Jr. in September 2009, and eight months later, Mr. Obama visited the company to praise American manufacturing.

Correction: November 17, 2011

An earlier version of this article misspelled the first name of the Energy department’s secretary. He is Steven Chu, not Stephen.

A version of this article appears in print on November 17, 2011, on Page A4 of the New York edition with the headline: Energy Secretary to Defend Solyndra Loan to Congress. Order Reprints|Today's Paper|Subscribe